AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS
EXHIBIT 10.1
AGREEMENT
AND GENERAL RELEASE OF ALL CLAIMS
This
Agreement and General Release of All Claims (“Agreement”) is entered into by and
between Fredericus X. Xxxxx (“You” or “Employee”) and Boston Scientific
Corporation (“BSC”) as of the latest date of execution by the parties to this
Agreement. You have been employed by BSC and/or one or more
affiliates of BSC. BSC may discharge its obligations under this
Agreement directly or through any affiliate. This Agreement shall not
become effective until the Effective Date (as defined in Paragraph 8(a)(v),
below). This Agreement supersedes and cancels any prior employment
agreements or arrangements You may have entered into with BSC except for (i) the
Agreement Concerning Employment for U.S. Employees (“Employee Agreement”)
attached hereto as Attachment 1, which you entered into by electronic
acknowledgment on April 1, 2009, and (ii) the Directors and Officers
Indemnification Agreement (“Directors and Officers Indemnification Agreement”)
attached hereto as Attachment 2, effective as of July 1, 2001. Your
obligations under the Employee Agreement shall be in addition or complementary
to and shall not be superseded by this Agreement. However, if there
is any conflict in terms between this Agreement and the Employee Agreement, the
terms of this Agreement prevail.
In consideration of the mutual
covenants, agreements, and representations contained herein, the adequacy of
which is hereby acknowledged, the parties hereto expressly and intentionally
bind themselves as follows:
1. Retirement
You represent and BSC acknowledges that
You are retiring from BSC for family reasons. You hereby acknowledge
and agree that your service as Executive Vice President and Chief Technology
Officer and as an employee of BSC will end effective June 30, 2010 (“Retirement
Date”). During the remainder of your employment, You shall perform
any and all requested responsibilities and provide any and all requested
transitional assistance.
2. Payments
by BSC
(a) BSC
shall pay You the lump sum amount of Six Hundred Thousand Dollars ($600,000.00),
less applicable payroll withholding for taxes and other applicable deductions
(the “Lump Sum Salary Payment”). BSC shall pay You the Lump Sum
Salary Payment within ten (10) business days following the later of (i) the
Effective Date, or (ii) the Retirement Date. You expressly
acknowledge that upon the occurrence of the Retirement Date, You will not be
eligible for any payments or benefits other than those described in this
Agreement under any existing BSC Severance Pay Plan and/or Layoff Notification
Plan.
(b) BSC
acknowledges that your retirement in accordance with this Agreement in
combination with your execution and nonrevocation of this Agreement shall
entitle You to a payment pursuant to The Boston Scientific Corporation Executive
Retirement Plan (the “Executive Retirement Plan”), which shall be paid in the
amount and at the time specified in Section 6 of the Executive Retirement
Plan.
(c) You
will remain eligible in the ordinary course for an incentive payment under BSC’s
2010 Performance Incentive Plan (“2010 PIP”). You acknowledge and
agree that due to your retirement and under the terms of the 2010 PIP, any
payment under the 2010 PIP will be a pro-rata portion of any payment that would
have been made had You remained employed by BSC for all of calendar year 2010,
such pro-ration to be determined based on your employment with BSC through your
Retirement Date. The funding of both the individual and team
components of your 2010 PIP payment will be based fifty percent (50%) on the
Corporate funding unit results and fifty percent (50%) on the CRV funding unit
results. You further agree that the individual component of such
payment shall be calculated using one hundred percent (100%) of the twenty-five
percent (25%) component of the 2010 PIP payment that is based on individual
performance. Your 2010 PIP payment shall be based on your previously
established 2010 PIP incentive target percentage of seventy percent (70%),
subject to 2010 PIP funding to be determined in the ordinary course under the
2010 PIP terms and conditions and further subject to the above-referenced
pro-ration. Any such payment will be made at the same time it is made
to other participants in the 2010 PIP, in other words in 2011, currently
anticipated to be made by March 15, 2011. You will not be eligible
for consideration for incentive payments under any other or future Performance
Incentive Plan, and You hereby waive any right to such consideration or such
payments.
(d) BSC
will pay You for all accrued but unused vacation time through the Retirement
Date under applicable BSC policy and in accordance with applicable state
law.
(e) BSC
will pay You the amount due You under our Executive Allowance Plan based upon
your employment through your Retirement Date in accordance with the terms of the
Executive Allowance Plan.
(f) BSC
has provided you with a lump sum of Twenty-one Thousand Six and 50/100 Dollars
($21,006.50) as a reimbursement of certain house-hunting, temporary leaving move
assistance and miscellaneous related relocation expenses (the “Reimbursed
Expenses”). BSC shall further reimburse You for or shall pay directly
certain other relocation costs totaling approximately Five Thousand Dollars
($5,000) that you incurred prior to March 15, 2010 in connection with
an anticipated 2010 relocation to Massachusetts, which consist of approximately
One Thousand Dollars ($1,000) for an agent’s fee for a Massachusetts property
tour and certain other real estate transaction costs, consisting of Minnesota
property appraisal fees, Minnesota and Massachusetts property inspection fees, a
Minnesota property title search and an attorney’s fee for review of a purchase
and sale agreement (the “Approved Pending Expenses”). To the
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extent
that BSC determines that the Reimbursed Expenses and the Approved Pending
Expenses constitute taxable income to you, BSC shall issue a further payment to
you to defray the anticipated taxes due on such amount using any reasonable
gross-up methodology determined by BSC. BSC’s obligation to provide
reimbursement of the Approved Pending Expenses shall be subject to your
presentation of appropriate documentation in a timely manner in accordance with
applicable BSC policy concerning relocation.
(g) To
the extent, if any, that You incurred the cost of moving personal goods to
Florida between February 3, 2010 and March 15, 2010, BSC shall reimburse You for
all reasonable such costs, subject to presentation of appropriate documentation
consistent with BSC policies. For the avoidance of doubt, any home
purchase expenses shall not be subject to reimbursement.
(h) BSC
acknowledges that You have the right to submit a written request to Xxxx
Xxxxxxxx, Chairman of the Board of Directors of BSC, and Xxxx Xxxxxx, Chairman
of the Executive Human Resources and Compensation Committee of the Board of
Directors of BSC (“Compensation Committee”), for an additional award based on
contributions You have made to the Company during Your
employment. Xx. Xxxxxxxx and Xx. Xxxxxx together shall have the sole
discretion to grant or deny any request for an additional award, and their
judgment in this regard is final. Only a decision by Xx. Xxxxxxxx and
Xx. Xxxxxx to xxxxx this request that is rendered in writing on or before May
10, 2010, shall be valid for purposes of this paragraph.
3. Termination
of Salary and Employment Benefits
Your current base salary at the rate of
Six Hundred Thousand Dollars ($600,000) per year and your participation in BSC’s
Medical/Dental/Vision Plans, 401(k) Plan, Stock Option Plan(s), and Global
Employee Stock Ownership Plan, if any, Accidental Death and Dismemberment
(AD&D), Business Travel Accident, and Short-Term and Long-Term Disability
Plans will continue until and will terminate as of your Retirement Date, as will
your accrual of vacation time. Your participation in BSC’s life
insurance plans, including any BSC funding of any such plan, will continue until
and terminate as of Your Retirement Date. For avoidance of any doubt,
this Agreement does not impact any life insurance policy or plan that You may
have that is outside any BSC plan, including any such policy that may previously
have been offered to you through or funded by BSC. You will
participate through the Retirement Date in all other benefits and benefit plans
in which You are currently enrolled to the same extent as do active
employees. Your participation in and entitlement to any and all other
benefits and benefits plans in which You are currently enrolled, but which are
not otherwise specifically addressed in this Agreement, terminate on the
Retirement Date. Subject to your election and continued eligibility,
You may continue coverage under BSC’s Medical/Dental/Vision Plans after your
Retirement Date pursuant to the Consolidated Omnibus Reconciliation Act of 1985
(“COBRA”), provided that You make timely payments of COBRA premiums and
otherwise satisfy the requirements of COBRA. BSC will cause You to be
provided with all legally required information and election materials concerning
your COBRA rights in a timely manner.
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4. Stock
Options, Deferred Stock Units and Performance Share
Units
Nothing in this Agreement is intended
to modify your rights and obligations with respect to previous grants of stock
options, deferred stock units and/or performance share units, including without
limitation (i) the acceleration of the vesting of your unvested stock options
based on your retirement eligibility, (ii) the conversion of all unvested
deferred stock units to shares of common stock based on your retirement
eligibility, and (iii) your forfeiture of all performance share units due to
your retirement less than one year after the date of the grant. The
terms of applicable grant agreements and plan documents remain in effect and you
qualify as having retired for purposes of the plans referenced in this Paragraph
4.
5. Indemnification
You shall have all rights to
indemnification with respect to legal claims and legal expenses that are
available to current and former officers of BSC under the Certificate of
Incorporation and Bylaws of BSC and to you under your Directors and Officers
Indemnification Agreement.
6. Expense
Reimbursement
BSC will
reimburse You in accordance with usual BSC policy for all unreimbursed business
travel and other out-of-pocket expenses incurred by You through the Retirement
Date in the performance of your duties as an employee of BSC. Such
expenses must be submitted no later than the Retirement Date.
7. Outplacement
BSC agrees to provide You with
outplacement assistance in an amount not to exceed Twenty-Five Thousand Dollars
($25,000.00), for a period of up to twelve (12) months, such assistance to be
provided by an outplacement assistance firm of your choosing, and to begin no
later than the Retirement Date.
8. Release
(a) Employee
hereby releases and forever discharges BSC and its subsidiaries, affiliates,
predecessors, successors, and assigns and the Directors, officers, shareholders,
employees, representatives and agents of each of the foregoing (collectively
“Releasees”) of and from the following as of the date of the Employee’s
execution of this Agreement:
(i) Any
and all claims, demands, and liabilities whatsoever of every name and nature
(other than those arising directly out of this Agreement), including (without
limitation) any claim in the nature of so-called whistleblower complaints to the
extent permitted by applicable law, and any and all claims, demands and
liabilities with
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respect
to Employee’s employment or the terms and conditions or notice of termination or
termination of his employment, benefits or compensation which Employee has
against Releasees, or ever had;
(ii) As
included in the above, without limitation, Employee releases all claims known or
unknown for tortious injury, breach of contract, and wrongful discharge
(including without limitation, any claim for constructive discharge), all claims
for infliction of emotional distress, all claims for slander, libel, or
defamation of character, all claims of retaliation, and all claims for
attorneys’ fees, as related to Employee’s employment, or the terms and
conditions or notice of termination or termination of his employment, benefits,
or compensation; and
(iii) Employee
specifically releases and forever discharges Releasees from any and all claims
based upon any allegation of employment discrimination, including (without
limitation) discrimination on the basis of race, color, sex, sexual orientation,
age (including any
claim pursuant to the Federal Age Discrimination in Employment Act (“ADEA”)),
religion, disability or national origin.
(iv) Notwithstanding
anything in the foregoing to the contrary, Employee does not release any right
to indemnification that Employee may have under Minnesota Statutory Sections
181.970 or 302A.521 or any rights of Employee under this Agreement.
(v) Pursuant
to Minnesota Statutory Section 363.031(2), Employee may rescind this Agreement
for any reason within fifteen (15) calendar days after he signs it (the
“Rescission Period”). To be effective, the rescission must be in
writing and hand-delivered or mailed within the Rescission Period to BSC, c/o
Xxxxxx X. Xxxxxx, Senior Vice President, Human Resources, Xxx Xxxxxx Xxxxxxxxxx
Xxxxx, Xxxxxx, XX 00000, or his successor. If mailed, the rescission
must be: (a) postmarked within the Rescission Period, (b) properly
addressed to Xx. Xxxxxx (or his successor) at the address specified in the
preceding sentence, and (c) sent by certified mail, return receipt
requested. If delivered by hand, it must be given within the
Rescission Period to Xx. Xxxxxx (or his successor). This
Agreement shall not become effective or enforceable until the day after the
Rescission Period expires (the “Effective Date”). Therefore, no BSC
obligations will arise under Paragraphs 2(a), (b), and (f) above, until the
Effective Date and no payments shall be made under such provisions until after
the Effective Date at such times as provided above. The Rescission
Period set forth herein is intended to encompass and run concurrently with the
7-day revocation period provided under the Federal Older Workers Benefit
Protection Act, which amends ADEA.
(b) BSC
hereby releases and forever discharges You and your heirs, administrators and
executors (“Your Releasees”) from any and all claims, agreements, obligations,
injuries, damages, causes of action, debts or liabilities (together “Claims”)
that BSC may have or may
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have ever
had, whether known or unknown, against any of Your Releasees as a result of any
facts or circumstances that occurred or existed or of which BSC had notice at
any time prior to the date of BSC’s execution of this Agreement; provided that
notwithstanding the foregoing, BSC does not release You or Your Releasees from
any Claims based on acts and/or omissions that satisfy the elements of a
criminal offense.
9. No
Damages Sought
Employee
represents and states that he has not sought and will not seek or accept any
damages or individualized relief in connection with any complaints or charges
filed against Releasees with any local, state or federal agency or court, and
Employee agrees that if any complaint or charge is filed on his behalf, he shall
take all reasonable steps necessary to refuse any damages or individualized
relief in connection therewith.
10. No
Liability Admitted
Employee acknowledges that neither
BSC’s execution of this Agreement nor BSC’s performance of any of its terms
shall constitute an admission by BSC of any wrongdoing by any of the
Releasees. BSC likewise acknowledges that neither Employee’s
execution of this Agreement nor Employee’s performance of any of its terms shall
constitute an admission by Employee of any wrongdoing.
11. Restrictive
Covenants and Other Obligations
Employee
acknowledges that he is subject to restrictions on post-employment activities
and other obligations under the Executive Retirement Plan and the Employee
Agreement. As part of the consideration for this Agreement, Employee
specifically confirms that he is subject to all obligations applicable to
Participants in the Executive Retirement Plan and to all obligations set forth
in the Employee Agreement. Such obligations include without
limitation the obligations (i) to return all documents and other property of
BSC; (ii) to maintain complete confidentiality concerning confidential
information of BSC; (iii) not to compete with BSC for twenty-four (24) months
following the Retirement Date; (iv) not to solicit customers of BSC for
twenty-four (24) months following the Retirement Date; and (v) not to solicit or
hire BSC employees for twenty-four (24) months following the Retirement
Date. All of the foregoing obligations are more fully set forth in
the Executive Retirement Plan and the Employee Agreement.
12. No
Detrimental Communications
(a) Employee
agrees that he will not make or cause to be disclosed any negative, adverse or
derogatory statements to any media outlet, industry group, financial institution
or consultant, client or customer of the Releasees regarding any of the
Releasees or about any of the Releasees’ products or services, business affairs,
financial condition or
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prospects
for the future. Furthermore, Employee hereby represents to BSC that
he has made no such communication, and Employee acknowledges that BSC relies
upon this representation in agreeing to enter into this Agreement.
(b) You
agree that You will refer any prospective employer inquiring about You and/or
your work at BSC to Xx. Xxxxxx (or his successor), who will, directly or through
a designee, in accordance with BSC’s usual policy on providing references,
verify your dates of employment and last position held but will release no other
information about You or the circumstances regarding your separation from
employment with BSC, except that the person responding may state that You
retired from BSC for family reasons.
13. Future
Assistance
BSC may seek the assistance,
cooperation or truthful testimony of Employee in connection with any
investigation, litigation, patent application or prosecution, or intellectual
property or other proceeding (collectively, “Proceedings”) arising out of
matters within the knowledge of Employee and/or related to his position as an
employee of BSC, and in any such instance, Employee shall provide such
assistance, cooperation or truthful testimony and BSC shall pay Employee’s
reasonable costs and expenses in connection therewith. Such
assistance and cooperation may include, without limitation, sharing
institutional and personal knowledge that is relevant to a Proceeding and
preparing for testimony as a fact witness in a Proceeding. Employee’s
obligations with respect to testimony as a fact witness in a Proceeding are to
appear without the necessity of a subpoena and to testify
truthfully. Employee acknowledges that in the absence of this
Agreement he could be compelled to testify pursuant to a subpoena, and therefore
no part of the consideration to be paid to Employee under this Agreement is
considered to include payment for any time spent testifying as a fact witness or
for the substance of any such testimony. Notwithstanding anything to
the contrary in this Agreement, statements made in the course of truthful
testimony in any Proceeding in which Employee is required to testify shall not
be considered to violate any provision of this Agreement, including without
limitation Paragraph 13. For purposes of this Agreement, all services
pursuant to this Paragraph 13, other than testimony and related time spent as a
fact witness that BSC could otherwise compel by a subpoena, are referred to as
“Cooperation Services.” BSC shall pay Employee at the rate of Three
Hundred Dollars ($300.00) per hour for his performance of Cooperation
Services. Employee agrees to invoice BSC for all Cooperation
Services, by delivery of such invoice to Xxx Xxxxx or his designee, by the first
business day of the quarter following the quarter in which they are
performed. BSC agrees to pay Employee within thirty (30) days of
receipt of such invoice. Employee shall perform Cooperation Services
and shall make himself available to testify as a fact witness upon reasonable
notice by BSC; provided that BSC shall make reasonable efforts, to extent
practicable, to accommodate Employee’s professional and personal commitments
when scheduling Cooperation Services and his appearance to
testify. For the avoidance of doubt, Employee’s obligations to
provide Cooperation Services and to provide truthful testimony as a fact witness
without the necessity of a subpoena are permanent obligations.
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14. Confidentiality
Employee agrees to keep confidential
the existence of this Agreement, as well as all of its terms and conditions, and
not to disclose to any person or entity the existence, terms or conditions of
this Agreement except to his attorney, financial advisors and/or members of his
immediate family provided they agree to keep confidential the existence, terms
and conditions of this Agreement. In the event that Employee believes
he is compelled by law to divulge the existence, terms or conditions of this
Agreement in a manner prohibited by the preceding sentence, he will notify BSC
(by notifying BSC’s Legal Department) of the basis for the belief before
actually divulging the information. Employee hereby confirms that as
of the date of signing this Agreement, he has not disclosed the existence, terms
or conditions of this Agreement, except as permitted by this Paragraph
14. Notwithstanding the foregoing, BSC acknowledges that it may be
subject to public disclosure obligations with respect to this Agreement or
material terms thereof. To the extent that BSC makes public
disclosure of information concerning this Agreement, You shall not thereafter be
subject to confidentiality obligations with respect to the same
information.
15.Failure to Meet
Obligations
In the event of a breach by Employee of
Paragraph 11, 12 or 14 above, the Executive Retirement Plan or the Employee
Agreement, Employee shall repay to BSC all of the amounts paid under Paragraphs
2(a) (b) and (f), above, and shall be liable, moreover, for any damages which a
court may determine and shall be subject to injunctive relief damages, and any
other relief which a court may award. The previous sentence shall not
be construed to have any effect on the Employee’s ability to bring an ADEA
charge with the Equal Employment Opportunity Commission (“EEOC”) or lawsuit
challenging the waiver of ADEA claims contained herein, or to participate in any
investigation or proceedings conducted by the EEOC (which term hereinafter shall
be deemed to refer to the EEOC or any state or local fair employment practices
agency acting as an EEOC deferral agency for purposes of filing an ADEA charge
with the EEOC); provided that this sentence shall not be construed to imply that
there is any question concerning the validity of the waiver of ADEA claims in
this Agreement.
16. Resignations
Employee hereby agrees to cooperate in
the execution of any document reasonably requested to evidence Employee’s
resignation from any and all positions that Employee holds with BSC or any
affiliate, effective as of the Resignation Date.
17. Governing
Law; Severability
This Agreement is entered into and
shall be construed under the laws of the Commonwealth of Massachusetts, without
regard to its conflict of laws rules. In the event any provision of
this Agreement is determined to be illegal or unenforceable by a duly authorized
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court of
competent jurisdiction, then the remainder of this Agreement shall not be
affected thereby, it being the intention of the parties that each provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law. Except as provided immediately below, if any portion of the
Release language in Paragraph 8, above, were ruled to be unenforceable for any
reason, Employee shall return the consideration provided under Paragraph 2(a),
(b) and (f), above, to BSC upon demand by BSC, which demand shall be made if
Employee were to file any claims against any of the Releasees in violation of
this Agreement. The foregoing sentence shall not apply to Employee’s
ability to bring an ADEA charge with the EEOC or lawsuit challenging the waiver
of ADEA claims; provided that this sentence shall not be construed to imply that
there is any question concerning the validity of the waiver of ADEA claims in
this Agreement.
18. Waivers;
Amendments
The failure of either party to require
the performance of any term or obligation of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation and shall not be deemed a waiver of any
subsequent breach. No modification, alteration, or change or waiver
of any provision of this Agreement shall be effective unless in writing and
signed by both parties wherein specific reference is made to this
Agreement.
19. No
Other Inducements
This Agreement sets forth the entire
understanding of the parties in connection with its subject
matter. Any and all prior negotiations are merged in this
Agreement. Neither of the parties has made any settlement,
representation or warranty in connection with the issues addressed in this
Agreement (except those expressly set forth in this Agreement) which has been
relied upon by the other party, or which acted as an inducement for the other
party to enter into this Agreement.
20. Persons
Bound by the Agreement
This Agreement shall be binding upon
and inure to the benefit of Employee, his heirs and estate and to the benefit of
the Releasees and its respective successors and assigns.
21. Assignment
of Interests
Employee warrants that he has not
assigned, or transferred or purported to assign or transfer any claim against
Releasees.
22. Prevailing
Party Entitled to Fees
In the event that any action or
proceeding is initiated to enforce or interpret the provisions of this
Agreement, or to recover for a violation of the Agreement, the prevailing party
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in any
such action or proceeding shall be entitled to its costs (including reasonable
attorneys’ fees); provided that if Employee files a lawsuit challenging the
waiver of ADEA claims contained herein, the prevailing party will be entitled to
his or its costs, including reasonable attorneys’ fees only to the extent
specifically authorized under federal law.
23. Taxation
of Payments and Benefits
BSC shall undertake to make deductions,
withholdings and tax reports with respect to payments and benefits under this
Agreement to the extent that it reasonably and in good faith believes that it is
required to make such deductions, withholdings and tax
reports. Payments under this Agreement shall be in amounts net
of any such deductions or withholdings. Except to the extent
otherwise specified, nothing in this Agreement shall be construed to require BSC
to make any payments to compensate You for any adverse tax effect associated
with any payments or benefits or for any deduction or withholding from any
payment or benefit. Each payment pursuant to this Agreement that is
due at a different time shall be considered to be a separate payment for
purposes of Section 409A of the Internal Revenue Code.
24. Representation
BSC hereby advises Employee to consult
an attorney of his choice before executing this Agreement. Employee
represents that, prior to executing this Agreement, he was advised to and did
review the provisions of this Agreement with counsel of his choice.
25. Approval
of Agreement
Employee acknowledges that
notwithstanding anything to the contrary in this Agreement, the effectiveness of
this Agreement, including section 2(h) of this Agreement, is subject to the
approval of this Agreement by BSC’s Board of Directors or the Compensation
Committee of the Board of Directors or any other committee of the Board of
Directors that is authorized to approve this Agreement.
The
parties have read the foregoing Agreement and know its contents, and know that
its terms are contractual and legally binding. The parties further
agree that they enter this Agreement voluntarily and that they have not been
pressured or coerced in any way into signing this Agreement.
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IN WITNESS WHEREOF, the
parties hereby agree.
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By:
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____________________________
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__________________________
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Fredericus
X. Xxxxx
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Date
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Boston
Scientific Corporation
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By:
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____________________________
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___________________________
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J.
Xxxxxxx Xxxxxxx
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Date
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President
& Chief Executive Officer
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